Hiring a bookkeeper can sometimes feel like a burden to your business especially when starting out. Some businesses have even tried going it solo and relying on applications to do all the heavy lifting until things start getting out of hand. That is when they tend to reach out to an accountant or bookkeeper…
What many don’t understand is that a bookkeeper will not just help keep your books in order; they will always go the extra mile to see you stay and thrive in business.
In a moment, we’ll share with you how a bookkeeper can help increase your business profits while still doing their ‘usual’ job of maintaining good books of accounts. Without further ado, here are 5 ways bookkeepers can help boost your business profits:
Preferably, your bookkeeper should possess a great deal of industry experience to be able to understand key expenditure items such as materials costs, labor costs, and direct and indirect overheads.
This way, they can make comparisons and evaluate whether an item of expenditure is overpriced or not and how or where to get it more affordable.
Dollars saved through such scrutinies can amount to substantial savings thereby boosting your profits.
Sometimes bad debts simply come about as a result of poor debt management policies. A good debt manager will put in place an airtight debt collection system that minimizes bad debts. Bookkeepers and accountants are trained to do just that; they can help initiate an effective process of following up on late payments, without necessarily harassing your customers.
A good system will not only reduce bad debts but it will also put in place preventive measures that will shield your business against future defaulters.
Supplier invoices need to be managed and processed in an accounting system. A bookkeeper will ensure that all the information relating to your suppliers is availed at a click of a button, giving you a clear picture of the pricing of your supplies, from different vendors.
The system can break down all the amounts being spent on different suppliers allowing you to negotiate for better prices from your major vendors during bulk purchases. This should help minimize your product cost, leading to better profit margins.
The amount of profit you’re getting right now could be as a result of planned or unplanned events. A bookkeeper can help you plan for your target profit by putting in place a well-thought-out plan to get there. The bookkeeper will do sales planning, costs and expenditures estimation, and ultimately the expected profits.
Sometimes all you need is a solid plan to help you get where you want to go, and a bookkeeper is better placed to give you a reasoned blueprint for your target profit.
To make smatter business decisions, you need real-time information. Bookkeepers will maintain an updated record of your business in a system to help you understand every aspect of your business at any given time. With such information, you can easily know how much profit you’re making at all times.
If you find that you’re not meeting your daily or weekly targets, you can put in place corrective measures early enough so that the monthly, quarterly, or annual targets are not affected.
Additionally, real-time data can help you factor in important things before accepting a client’s deal:
Is the price tallying with my revenue plan?
How much should my costs stretch to?
What are the tax implications of the transaction? …and so on…
But you can only raise these questions if you have updated information relating to past projects, optimal order quantities, and items of expenditure.
Clearly, how hiring a bookkeeper can have a positive impact on your business profits. However, take caution to hire a bookkeeper that is knowledgeable in your industry; otherwise, the profit-maximizing hacks mentioned above may never help you much.
Still got questions about how to maximize your business profits using the available bookkeeping hacks? Don’t hesitate to shoot us an inquiry.